Futures Turn Higher After Jobs Report

The Dow turned higher Friday amid a giant sigh of relief in the market that only half a million jobs were lost in December. Market buzz had indicated the number could be as high as a million.

Still, the numbers were staggering: Employers slashed 524,000 jobs from nonfarm payrollslast month, the Labor Department reported. Prior months were revised to show that an additional 154,000 jobs were lost between October and November than previously thought. That means a total of 1.9 million jobs were lost in the four months through December, and the total for all of 2008 was 2.6 million, the most since 1945.

The unemployment rate jumped to 7.2 percent, the highest in more than 15 years, from a revised 6.8 percent in November.

"Overall, a terrible report," Ian Shepherdson, chief U.S. economist at High Frequency Economics, wrote in a note to clients. "[T]he only possible glimmer of light is that the maximum rate of fall of payrolls is hopefully not far off," he said.

Asian stocks closed mixed, while European shares were in the red with more bad news coming from big economies in the area.

President-elect Barack Obama warned the U.S. economy could stay mired in recession for years without further bold action, but he gave few new details about a package of tax cuts and public-works spending which likely to cost over $800 billion.

An aide did say that the plan would be in part an overhaul of the current Troubled Asset Recovery Program to focus on getting credit markets flowing.

Citigroup became the first major bank to support a controversial plan to let bankruptcy judges alter mortgages in an effort to prevent more housing foreclosures and halt the economic decline.

Also in the banking sector, Lehman Brothers Holdings has reached an agreement in principal to sell its merchant banking business, made up of two private equity funds, to management of the funds, according to a Reuters report.

A formal auction was run for the assets by Lazard on behalf of Alvarez & Marsal, Lehman's restructuring advisors, the source said.

In the Bernard Madoff scandal, the financial carnage is now spreading from charities and wealthy individuals to labor union pension funds, CNBC has learned. One union, the Carpenters local in Syracuse, N.Y., has lost the majority of the $100 million to $150 million it had in pension money because of its dealings with Madoff, people close to the matter said.